Islamic Capital Markets and Products

CHAPTER 15Concluding Remarks

By Simon Archer and Rifaat Ahmed Abdel Karim

The development of the ICM internationally provides a good illustration of the institutional interdependence between the market and the state. The country in which the ICM is the most developed is Malaysia, where the public authorities have made a point of facilitating the development of the various branches of Islamic finance, including banking and the capital market. The Bank Negara (central bank) and the Bursa Malaysia (stock exchange) each has a Shari'ah Committee to provide overall guidance on Shari'ah compliance. The Islamic Financial Services Board and the International Islamic Liquidity Management Corporation have also been made welcome in the country. The legal and institutional infrastructure has been conducive to the development of Islamic finance, including the ICM. Malaysia benefits from being a sizeable country with an economy and a conventional capital market that are relatively well-developed, and its legal system based on common law has been able to accommodate Islamic finance without too much difficulty.

Hardly any other Muslim majority country is able to offer such support to Islamic finance. One that must be mentioned is Sudan, where the economy is operated on a Shari'ah-compliant basis. The Khartoum Stock Exchange inaugurated its electronic trading system in March 2016. Another country in which Islamic finance is well-established is Bahrain, where the central bank provides regulation, ...